On July 21, the Senate Finance Committee approved by a vote of 23 to 3 a bipartisan tax bill to renew for two years more than 50 expiring and expired tax provisions known as “tax extenders.” The provisions that are being extended generally provide tax benefits designed to incentivize particular behavior from American taxpayers, e.g., using renewable energy. As originally enacted, most of these provisions are designed to be temporary incentives and remain in effect for short periods of time, primarily because of their high costs and their impact on the federal budget. Thus, if not “extended” they will permanently expire.

While some would prefer that these provisions either be permanently enacted or otherwise eliminated entirely, in order to provide certainty in the tax code for the next two years and encourage economic growth and development, innovation, and job creation, the Finance Committee once again took this stopgap approach. If approved by Congress, the legislation could cost the federal government an estimated $95 billion over the next 10 years, according to the Joint Committee on Taxation. The Finance Committee has indicated that it will use a broad reform of the tax code in the next few years as a way of determining the long-term fate of these provisions.